Transocean has been down over 5% the past two days and has surpassed are stop loss limit. The reason for the drop in price is due to the explosion of a rig off the Gulf Coast. Going forward I have redone the model and factored in the loss of the rig for this year- its contract was scheduled to start in the 4th quarter- and next year. These losses will have an eps impact projected of $.10 this year and $.40. From what I have read and what information there is about the companies contracts and insurance it seems insurance will cover must of the cost of replacing the Rig. Further more it seems that Transocean will not be responsible for the oil spill but rather BP as stated by President Obama, however I am unsure. Personally I think Transocean is currently trading at a severe discount do to market over reaction.
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